ACCOUNTING EXAMINATION

MULTIPLE CHOICES
1. Properties used in the operation of the business
A. Assets B. Revenue C. Owners Equity
D. Income from the
other operation
2. Claims by creditors to the property of the business
A. Owners Equity
B. Accounts Receivable
C.
Liabilities
D. Expenses
3. Owners right and claims to the property of the business
A. Revenues
B. Owners Equity
C. Assets D. Restricted
Capital
4. Increases to the owners equity resulting from business operation
A. Expenses
B. Accounts receivable C. Revenues
D. Capital
5. Organization made up of many owners called stockholders
A. Sole Proprietorship B. Corporation
C. Partnership
D.
Business Combination
6. Debits
A. Increases assets and decrease expenses, liabilities, revenue and
owners equity
B. Increases assets and owners equity and decreases liabilities,
expenses and revenue
C. Increases assets and expenses and decrease liabilities, revenue
and owners equity
D. Decreases assets and expenses and increase liabilities, revenue
and owners equity
7. The purchase of a service vehicle on account
A. Will increase assets and increase liability
B. Will increase assets and decrease liability
C. Will decrease equity
D. Will decrease assets and increase liability
8. The company collected in full an account receivable. Considering this
transaction alone,
A. Total assets will remain the same
B. Total assets will increase
C. Total assets will decrease
D. Total equity will increase
9. A current assets will include coins, currencies and bank deposits is
called:
A. Cash equivalent
B. Cash
C. Accounts receivable
D. Official tender
10.
The following can be found in an income statement exept
A. Income
B. Expenses
C. Assets

D. Net income or net loss

TRUE OR FALSE
____1. The single entry bookkeeping system uses debits and credits.
____2. A calendar year is the accounting period used by most businesses.
____3. The cash accounting method is the recommended method for a
business to use for recording its business transactions.
____4. The double entry bookkeeping system uses debits and credits
____5. A sole proprietorship is a type of business organization made up of
many owners.
____6. The cash method of accounting provides a better indicator of a
business profits or losses.
____7. Accounting is the process of recording and classifying business
financial transactions.
____8. The only users of financial information are the stockholders of the
corporation.
____9. Profits are the amount that business revenue exceeds its expenses.
____10. Expenses increase owners equity.
DRAW A T ACCOUNT AND INDICATE THE PROPER POSITION OF THE
FOLLOWING ITEMS IN ITS DEBIT AND CREDIT SIDES:
A.
B.
C.
D.
E.
F.
G.
H.
I.
J.

INCREASE IN PROPRIETORSHIP
DECREASE IN LIABILITIES
DECREASE IN INCOME
DECREASE IN EXPENSES
INCREASE IN ASSETS
DECREASE IN ASSETS
INCREASE IN INCOME
INCREASE IN EXPENSES
DECREASE IN PROPRIETORSHIP
INCREASE IN LIABILITIES

RULES OF DEBITS AND CREDTIS

Indicate (+) for increases on the following accounts and (-) for decreases
of the following accounts.
Assets
Owners Equity

Expenses

Liabilities

Income

PROBLEM SOLVING
At the beginning of the year Quickminds Corporation has a total
assets of P500,000.00, liabilities of P150,000.00 and Stockholders equity
of P350,000.00, if the total assets increase by twice as much as the
amount of liabilities and total liabilities increase by one third as much as
the stockholders equity, How much is the total stockholders equity at the
end of the year?
a.
b.
c.
d.
e.

P564,250.00
P666,666.67
P533,333.33
P650,000.00
None of the above

Show answer ______________